In the case of Day & Zimmermann, Inc. v. Challoner et al., 1975, the U.S Supreme Court dealt with a dispute over an arbitration award in favor of employees who were terminated by their employer, Day & Zimmermann (D&Z). The company had entered into a collective bargaining agreement with its workers which included an arbitration clause for resolving disputes. When D&Z laid off certain employees due to lack of work and then later rehired new ones instead of recalling those previously let go, the union filed grievances on behalf of these workers and won at arbitration. However, D&Z refused to comply with this decision arguing that it was not bound by it because they believed that decisions about layoffs and recalls were management prerogatives not subject to arbitration under their contract. The lower courts sided with the company but upon reaching the Supreme Court; it ruled in favor of the employees stating that once parties agree to resolve certain disputes through arbitration as per their contract terms then they must abide by such outcomes even if they disagree with them.

In the dissenting opinion for Day & Zimmerman, Inc. v. Challoner et al., Justice Brennan disagreed with the majority's decision to dismiss the case due to lack of federal jurisdiction. He argued that there was a substantial federal interest in this case because it involved issues related to labor relations and collective bargaining agreements under Section 301(a) of Labor Management Relations Act (LMRA). According to him, these are matters which should be governed by federal law rather than state law as they have national implications affecting interstate commerce and labor peace. Therefore, he believed that even though there might not be complete preemption of state laws in such cases, at least some aspects could fall within exclusive federal jurisdiction if they were closely intertwined with LMRA provisions or policies.